Only One Person Knows How It Works
Key person risk: the signs, what it puts at stake, and how to reduce it for good
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- Works with Xero, MYOB and the systems you already use
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Short answer: if only one person knows how a spreadsheet, database, process or integration works, your business has a key person risk. The fix is to get that knowledge out of their head and into something the business owns: document the process, map how it fits with everything else, then move it into a proper system that more than one person can run.
This is rarely anyone's fault. Usually a capable person built something to solve a real problem, it worked, and the business came to depend on it. The risk grows quietly until they take leave, get sick or resign.
What a Key Person Dependency Puts at Risk
Leave, illness or resignation
When that person is away, the work waits or gets done badly. When they leave, the knowledge leaves with them, often with only a few weeks’ notice to hand it over.
Errors nobody else can spot
If only one person understands the formulas, the logic or the workarounds, nobody else can check them. A mistake can sit in quotes, pay runs or reports for months.
It can’t grow with the business
More customers, more jobs or another entity means more work through the same person and the same fragile tool. They become the bottleneck, however good they are.
Pressure on the person themselves
They get called on holidays, can’t move into a bigger role, and carry the worry of the whole thing breaking. Good people leave over this.
Signs Only One Person Knows
- A spreadsheet that runs quoting, scheduling, pricing or job costing, and only one person edits it
- An old Access database or in-house system that nobody else will touch
- An integration or export that one person runs, and fixes when it fails
- Questions that always end with “ask them, they know how it works”
- Leave that gets planned around one person’s month-end or pay-run tasks
- New staff who learn the process by sitting next to that person, because nothing is written down
Spreadsheets are the most common case. See when Excel isn't enough for your business.
How to Reduce Key Person Risk
Work through these in order. Each step reduces the risk on its own, so you can stop when it's low enough.
- Document what they do. Sit with the person and write down the steps, the inputs, the outputs and the exceptions they handle from memory. Plain notes and screenshots are fine.
- Map how it connects. Show where the information comes from, who relies on the result and what happens when it's late or wrong. Business process mapping
- Move it into a proper system. Replace the fragile spreadsheet or old database with something built properly, with access controls, history and more than one person able to run it. Spreadsheet replacement or Access database replacement
- Connect it to your other systems. Remove the manual exports and imports that only one person knows how to run, so the information flows into Xero, MYOB or your job system on its own.
- Share the knowledge. Train a second person, keep the documentation with the system, and make sure someone outside the business can support it if needed.
For more on how this happens, read when your business runs on a system nobody understands, or go back to other signs your systems are costing you time.
Key Person Risk FAQs
What is key person risk?
It is the risk that the business can’t carry on normally if one particular person is away or leaves. In most businesses it isn’t the owner or a senior manager; it’s the person who built the quoting spreadsheet, looks after the old database, or knows how to fix the integration when it stops.
Isn’t documentation enough to fix a key person dependency?
It helps, and it’s the right first step. But if the work still depends on a complicated spreadsheet or a system only one person can change, a document only tells someone else how fragile it is. Lasting fixes move the work into a system that more than one person can use, check and support.
How do we raise this without the person feeling threatened?
Treat them as the expert, because they are. Explain that the goal is to take pressure off them, so they can take leave without being called and spend less time keeping things running. Their knowledge is what makes the new process work, so involve them from the start.
Do we need to replace the spreadsheet or database straight away?
Not always. Start by documenting and mapping it so you know exactly what it does. Then decide: some can stay with better controls, some should move into an existing system, and some are worth replacing with something built properly. The mapping tells you which is which.
What if that person has already left?
Then the first job is working out what the spreadsheet, database or integration actually does, from the files, the formulas and the people who use the results. It takes longer than asking the person who built it, but it can be done, and it is the same starting point for moving it into a proper system.
Does Your Business Depend on One Person?
Tell us what depends on one person. We'll tell you honestly whether it needs documenting, connecting or replacing, and where to start.
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